This week's retail news 'you may have missed'....
At mdj2, we’re passionate about retail and always looking to share our news, views and insights. With so much information out there, we wanted to share just a small selection of articles from last week that we found interesting…??
Selfridges wants resale, repair, rental or refills to near half of transactions by 2030
Selfridges?is aiming for almost half its interactions with customers to be based on resale, repair, rental or refills by 2030.
The move comes as Selfridges responds to increasing demand for more sustainable shopping. The retailer said it wanted to step up action after increasing sales of second-hand items by 240% to 17,771 pieces last year.
It also facilitated 28,000 repairs, more than a third of which were pairs of trainers, in its effort to operate in a more environmentally sustainable way.
More than 2,000 items were rented out to Selfridges customers over the year and it sold more than 8,000 refills.
Andrew Keith, managing director of the department store group, said its?‘Reselfridges’?initiative aimed to change the way that people shop and would form the “backbone of the business”, making up 45% of transactions in future.
Setting a deadline of 2030 to reach that target, Keith said: “We have got to commit to a significant and fundamental shift in the way we do business and use the platform of Selfridges for change.”
Keith said Selfridges’ new owners, the?Thai conglomerate Central Group?and?Austrian real estate company Signa Holding, which recently finalised ￡4 billion acquisition of the group, was “very excited” about the green plan and the takeover was an opportunity to accelerate some of its goals with their “support and encouragement”.
He said the first two years of?Selfridges’ Project Earth?plan had been about experimentation and pilots, with only 5% or 6% of transactions with shoppers currently based on “circular” models such as resale or repair.
Repair services will now be offered outside London at its Birmingham and Manchester stores and it will be easier to book repairs online.
Rental, which Selfridges admits has had fairly limited uptake during the pandemic, will also expand into new categories including childrenswear, accessories, fine jewellery and menswear, and refill services will be made more available.
“The important thing is encouraging people to think how they can extend the life of a product,” Keith said. “We are enabling customers to add life into their wardrobes above and beyond buying new.”
Poundland doubling number of lines selling at ￡1 in price ‘reset’
Poundland?is leaning further into its single-price point roots as inflation squeezes shoppers’ finances, by doubling the number of lines costing ￡1.
The variety discounter is “resetting” prices across its 800-plus stores, to add new ￡1 lines including Cadbury Dairy Milk (95g), Gillette Shave Foam (200ml),?Domestos Bleach (750ml) and Toilet Duck Pine (750ml).
It follows a similar move in June that saw Poundland increase the proportion of its range costing ￡1 or less from about half to 60%.
Poundland aimed squarely at the multiples in its announcement of the move, which also lists the next stores due to gain frozen and chilled food, taking the total offering the range to 350 by this autumn, alongside?Pep&Co?clothing.
“By confirming that it’s on track to bring chilled and frozen food and new clothing departments to almost half its stores by the year end, Poundland is sending a clear message to Brits managing soaring inflation – the discount store has never been a stronger alternative to the supermarkets,” said a spokesman.
Poundland COO Austin Cooke?said: “Right across the country, our colleagues are working hard to bring their communities more value, in more places, on the items they want and need, week in, week out.
“And as we extend into exciting new categories such as chilled and frozen food and clothing, whether customers want a full shop or to top-up, we’re continuing our mission to deliver the very best value, on the items we know our customers need most.”
Poundland’s latest pricing moves are a row-back from a years-long transformation strategy that saw it gradually introduce new price points both higher and lower than ￡1.
Latest Poundland accounts at Companies House revealed more than a third of its sales were at prices other than ￡1 in the year to 26 September 2021, up from 26% in previous 12 months.
The Entertainer teams up with Tesco to launch supermarket toy concessions
The Entertainer?has teamed up with?Tesco to launch concessions in 35 of the grocer’s stores.
The trial partnership will launch in October and will offer Tesco customers the chance to shop The Entertainer’s large range of products.
The Entertainer will retain full oversight of product range, pricing and merchandising across the stores, and will run free-of-charge and all-year-round events plus character visits for children of all ages,?Toy World?reported.
The full list of Tesco stores that are part of the rollout is set to be announced over the coming weeks.
The Entertainer chairman and founder, Gary Grant?said: “We’re always looking for new and innovative ways to bring the wonder of The Entertainer to customers, so we’re very excited to announce this partnership with Tesco, which takes our products and experiences directly to families and children right in the heart of their local communities.
“The in-store collaboration will provide shoppers with the chance to shop our best-selling and affordable range of the latest toys and games, which will include products from Addo and Early Learning Centre, from more locations across the country than ever before.
“Our mission when we launched The Entertainer in 1981 was simple – to become the best-loved toyshop, one child, one community at a time – and we’re incredibly proud that this partnership will enable us to continue achieving this mission.”
Tesco head of strategic partnerships, Louise Goodland?said: “We’re delighted to launch this trial with The Entertainer team, which is a leading experts in its field. We’re excited to work alongside the retailer and to bring a new offering to our customers.”
How JJ Van?Oosten?has transformed Kingfisher’s digital strategy
Technology’s role within the retail sector is getting bigger. Hundreds of thousands of retailers globally are ramping up technology in the wake of geo-political, economic and supply chain tensions which threaten the way business is conducted.
International home improvement company,?Kingfisher?– home to?B&Q and Screwfix, among others – is no different.
Its large network of stores have transformed the home improvement sector in the UK since the group’s launch in the 1980s. The UK’s largest DIY retailer B&Q opened its doors in 1969; since then it has opened over 300 stores and become the leading brand in the sector.
A number of individuals have been instrumental in turning Kingfisher’s retail subsidiaries into leading players, by leveraging the latest in retail technology.?Chief digital officer JJ Van?Oosten?is one of those.
“I go into relatively large and established retailers and then I bring them into the modern age,” Van?Oosten?tells Charged.
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That is exactly what he has done at Kingfisher, transforming B&Q’s famous ‘diy.com’ URL from a traditional online retail platform into one of the biggest marketplaces in the UK, attracting over 3.5 million customers weekly and stocking over 40,000 home improvement products.
The Kingfisher marketplace model
The move towards a marketplace model makes sense. Almost 900,000 UK businesses are currently selling on online marketplaces, generating an estimated ￡282 billion worth of sales every year, according to digital payment firm?Shieldpay.
“In DIY across the world there are around 20 million SKUs and approximately 179,000 merchants across the world. When you look at what they should they search for, it’s clear our customers are expecting to have a much broader range,” JJ says.
“Sometimes we don’t have certain ranges – that might be special lights for exterior or interior projects, wallpapers, specialist tools that we don’t have. It makes a lot of sense for us to set up a marketplace.”
Listening to customer feedback, Van?Oosten?believes it was a good decision.
“We launched it in March and it is going pretty damn good to be honest. And that’s not me marking my own homework here. Customers are trusting what they’re finding, and they’re expecting us to provide them with trusted merchants and products as well.”
Van?Oosten?points out that the element of trust was particularly important to Kingfisher, given the lack of vetting process from some marketplaces – such as Amazon – when a seller wishes to sell via the platform.
“Customers also like the fact that they can return some of the products easily, although we don’t have a high level of returns,” Van?Oosten?adds.
Van?Oosten’s?comparisons with?Amazon’s?marketplace don’t stop there.
“When you think about it strategically, our business has always been very linear. We’ve always bought from a specific and curated range of suppliers. We put the product into our supply chain and then it goes on the shelves, eventually you make a good margin on that.
“With what we’re doing here – and we’re not the only ones [to have launched a marketplace] – we now have more traffic in all DIY categories than Amazon.”
The importance of omnichannel
While Van?Oosten’s?role is focused more on the digital side, he doesn’t downplay the importance of an omnichannel model.
“Stores are pretty important for various reasons. One of them is that they enable you to be local. Another is that you are able to use them as micro-fulfilment bases, which enables you to reach customers much faster.”
Scaling up Kingfisher’s technology and ensuring it offers an omnichannel experience has also helped the merchants selling on?diy.com.
By automating a huge number of processes, merchants can sign contracts automatically, upload SKUs automatically and manage customer orders automatically. But becoming a ” technology-enabled business” with “millions of SKUs” is not enough, according to Van?Oosten.
“You also think about you can also use the stores most efficiently – not just to do click and collect or returns, but also to actually provide speed, convenience and a real benefit to customers,” he says.
The data detail
Another point of importance for Van?Oosten?is how Kingfisher uses its data, which is vital for the business, right across everything from forecasting and purchasing to product visibility.
Forecasting particularly relies heavily on having up-to-date technology and data – and Kingfisher’s investment in both of these allows the retailer to maximise its customer offer.
“We are able to keep our short-term forecasting really accurate because I know exactly what my customers are buying and looking out for tonight at each store level,” Van?Oosten?explains.
“And then we can start to adapt the replenishment algorithm that we have at store level, which in turn means we can make better decisions in terms of purchasing.”
The company also sources product from countries right across Europe and the Far East – so there’s a lot of goods moving around, making it crucial to know where things are and where they are heading.
“Data helps a lot in terms of those efficiencies,” says Van?Oosten, pointing out that visibility of inventory is crucial to the success of any omnichannel business.
Growing Kingfisher’s digital offer
Now the foundations have been laid successfully, Van?Oosten?wants to focus on scaling?diy.com?to new heights. Business developers are currently onboarding merchants at “a rate of knots”, with all of them focusing on the DIY market
“We got to over 100,000 SKUs pretty damn quick, so we needed to scale it up,” he says.
The importance of a high number of SKUs is instrumental in helping to gain more business, according to Van?Oosten.
“The more SKUs we have, the better my position our position on?Google?is for our category. The higher SEO ranking we have, the more our first party products will be able to benefit.”
Speed is an important component in almost any modern business and Kingfisher has changed the game by entering into the quick commerce sector by way of?Screwfix Sprint, which is essentially a rapid DIY delivery service.
“If you order something on your app, you will get it picked and ready in?Screwfix?in under one minute. That’s our promise. That is pretty damn fast and the customers absolutely love it”, Van?Oosten enthuses.
“The beauty of Screwfix is that we know every single inventory in real time, so basically each trade counter is part of a big virtual warehouse.”
It’s clear that investing in digital and prioritising consumer needs has been crucial to Kingfisher’s success as the home and DIY retail giant continues to scale at speed. With ongoing tech investments, a data-driven omnichannel offer and one of the biggest marketplaces in the UK under its belt, it’s fair to say Kingfisher is now well and truly leading the field in Van?Oosten’s?‘modern age’.
Wilko pushes forward rent changes to conserve cash
Wilko?has warned landlords that it will be paying its quarterly rent bill in monthly instalments to manage cashflow as it conserves cash in order to stock up for Christmas.
According to?The Sunday Times, the family-owned discounter has made the move due to “supply-chain volatility” and the “inflation we’re all currently suffering”.
Wilko has also been working with debt advisors from?Interpath?Advisory?on a refinancing of its ￡37.5 million revolving credit facility.
According to a source close to the talks an agreement with the discounters lenders “was close”.
“Trading is tough for everybody … we’re having to make smart choices,”?Wilko chief executive Jerome Saint-Marc?told The Sunday Times.
“We’re confident in our financial stability and have strong plans for the future. No covenants have been breached on our current facility.”
In the year to January 2021, Wilko reported pre-tax profits of ￡4.4 million on sales of ￡1.36 billion, however, this year it suffered from supply-chain disruption, high freight and increasing wage bills.